In the first part of this series we took a look at Customer Relationship Management for real estate companies. In this part, we will discuss Procurement Management Software for real estate.
Procurement Management System (PMS)
The primary objective of a Procurement Management System (PMS) is to help you get what you are paying for, from the right person and at the right quality and ethical standards. It helps you to manage the source-to-settle cycle of purchasing items. This is especially important for real estate companies that are into mass housing for procurement of necessary building materials and house fittings but any real estate company that engages in building projects needs it too.
Essentially, the procurement process has the following steps
- Source suppliers
- Select supplier
- Take delivery of items
- Inspect and approve delivery
- Settle supplier payments
A procurement management system can be used to create purchase orders (with top management approval workflow) and collect quotes from suppliers for your building materials. The supplier qualification and contract standards rules can also be incorporated into your PMS to standardize selection of suppliers that match your company contract ethics and supplier standards. Price comparison of quotes against quality can also be integrated.
Once you select credible supplier(s), your PMS collects invoices online from suppliers and you can take delivery of items after approval of the invoices. Then you get to inspect the delivered items again, against the contract standards and approve the delivery if the standards are met. After approval, your PMS is also used to send information to accounts payable to settle the payment of the supplier.
All these processes can be managed with your PMS with every stage recorded by who approved what and when. Top management approval workflow can also be integrated at each point to ensure adequate supervision of the process.
Modern PMS are usually deployed in the cloud for web access as this helps you to easily interact and exchange documents like quotes and invoices with your suppliers at every stage of the purchase cycle. They also integrate analytics to help you with price comparison, supplier performance history, cost trajectories and more.
Building material costs, quality and choice of supplier play a vital role in your total investment on projects and having a system that ensures those are taken care of is also pivotal for your real estate company.
Benefits of PMS
- Improve efficiency and automate source-to-settle procurement processes
- Improve supplier management
- Standardize the contract lifecycle
- Support for a mobile workforce by deploying in the cloud
- Efficient collaboration – within team and with suppliers
- Embedded analytics – this will help you use the information from previous and current purchase processes to make better informed decisions about your purchases.